Construction Loan Monitoring

Who this is for

Construction loan monitoring supports the parties whose capital is exposed to a project's completion risk: senior construction lenders, mezzanine and bridge lenders, and equity or capital partners funding ground-up and heavy-renovation commercial real estate. When disbursements are released against reported progress, an independent set of eyes in the field is what separates funding that is supported by completed work from funding that is not.

ALLOT acts solely for the capital side. We are not the borrower, the general contractor, or the design team — our only interest is giving our client an accurate, unconflicted picture of project status and risk throughout the loan term.

Pre-closing baseline review

Monitoring is only as good as the baseline it measures against. Before the first draw, we establish that reference point by reviewing the approved budget and schedule of values, the construction schedule, the executed contracts, the contingency and interest reserve, and the permit and approval status. This baseline becomes the yardstick every subsequent draw and site visit is measured against.

Monthly site observation & progress verification

On a recurring cadence — typically monthly, aligned to the draw cycle — we observe the site firsthand and document actual physical progress against the schedule of values and the construction schedule. The question we answer for our client is direct: does the work in place support what is being requested? We photograph conditions, note trade-level progress, and flag divergence between reported and observed status early, while there is still room to respond.

Draw & budget review

Each draw is reviewed against the baseline budget and verified field progress. We look at:

• Percent complete by line item, reconciled to what is actually installed;
• Budget movement — reallocations, buyout savings, and overruns;
• Change orders and their effect on the guaranteed maximum or contract sum;
• Retainage held and released; and
• Stored materials and their documentation.

The output is a clear recommendation the lender can act on, with any exceptions identified and explained. For the detailed payment-application workflow, see Construction Draw Review & Administration.

Cost-to-complete, contingency, schedule & issue tracking

Verified progress is only half of the risk picture; the other half is what it will take to finish. Across the loan term we track:

• Cost-to-complete against the remaining loan balance and available reserves;
• Contingency drawdown and whether the remaining balance is proportionate to the work left;
• Interest reserve burn against the projected timeline;
• Schedule slippage and its funding implications;
• Insurance, permits, and violations — lapses, expirations, and open regulatory items; and
• Open issues, tracked to resolution rather than noted once and forgotten.

Reporting cadence & escalation

Findings are delivered as a consistent, dated monitoring report tied to each draw, written for the people making funding decisions — not a data dump. Routine items are reported on cadence; material risks are escalated promptly rather than held for the next cycle. Reporting is tailored to each stakeholder's vantage point, whether that is a senior lender tracking basis or a capital partner watching reserve adequacy and completion risk.